As the political climate shifted after the 1972 elections and the Trudeau administration sought to mollify western voters, MSUA officials, like those at DREE, began to look to provincial and private sector partners rather than centralized planning to achieve national urban development goals. By the middle of the decade, MSUA officials viewed public-private partnerships as a mechanism through which to secure private sector buy-in to Trudeau’s national planning agenda and to help finance urban development projects. DREE was prohibited from entering into direct agreements with municipalities or the private sector, but MSUA’s officials had greater freedom to facilitate joint ventures between the public and private sectors.82 They did so with a wary eye on similar partnerships in the United States and mandated that in Canada public-private partnerships must “satisfy the principles of responsible government,” which meant that no public agency involved in a partnership could relinquish its statutory duties to the private sector.83 While MSUA officials acknowledged the need to provide an “attractive climate” for private developers, they also insisted that “no private agency should be able to profit from the public purse unduly” and that the government should “get a fair social return” for its investments.84 Public-private partnerships were a fledgling enterprise in Canada in the 1970s, but thanks to DREE and MSUA, public officials at all levels of government were cautiously optimistic that partnerships might be part of the solution to the country’s urban and regional development problems. Hamilton’s elected officials had reason to believe that the Allegheny Conference-style partnership they desired might be on the horizon.
In the United States, as in Canada, tensions over urban and economic development simmered in the late 1960s within the federal system and between ascendant and declining regions. Four months after Trudeau was sworn in as prime minister, Nixon accepted the Republican presidential nomination. Nixon, like Trudeau, took office intending to restructure the relationship between national and subnational governments. Unlike Trudeau, Nixon did not see centralized planning as a vehicle through which to solve social problems. Instead, he argued that federal intervention exacerbated social problems. His predecessor’s Great Society programs had not ended poverty or the urban crisis, but they had dramatically expanded the federal bureaucracy and increased the complexity of federal aid to city and state governments. Democrats criticized Johnson for underfunding social programs, while Republicans denounced them as too expensive, civil rights leaders demanded a Marshall Plan for cities, community groups complained about increased red tape, and urban violence rose rather than fell. These circumstances allowed Nixon to take office with substantial bipartisan support for his plan to return control over urban affairs to lower levels of government, a proposal that found a receptive audience in the nation’s state houses.85
During his first year in office, Nixon reminded Americans that the nation faced “an urban crisis, a social crisis—and, at the same time, a crisis of confidence in the capacity of government to do its job.” These crises, he said, were the legacy of three decades of failed social experiments emerging from New Deal. The government institutions established under Franklin Delano Roosevelt and expanded under successive Democratic presidents, Nixon explained, had become a “bureaucratic monstrosity,” whose “entrenched” social programs were no longer relevant. His solution was simple: Nixon would restore to the states the autonomy Roosevelt had taken from them. It was time, he declared, for “a New Federalism,” a devolutionary program intended to decentralize authority away from the federal government and return power and money to the “states and the people.”86
Nixon intended to decentralize federal power through revenue-sharing programs. He introduced a new program, general revenue sharing, designed to transfer a portion of federal revenue back to state and local governments. The week after announcing his New Federalism agenda, Nixon sent a message to Congress outlining a plan for general revenue sharing “to be used as the States and their local governments see fit—without Federal strings.” In his Congressional message, Nixon pointed particularly to the problems facing cities. Under Johnson, he argued, the federal government had promised too much and provided too little, which had created an urban crisis and led Americans to lose faith in the federal government. “Ultimately, it is our hope to use this mechanism to so strengthen State and local government that by the end of the coming decade, the political landscape of America will be visibly altered,” Nixon advised Congress, “and States and cities will have a far greater share of power and responsibility for solving their own problems.”87
Nixon portentously described revenue sharing as a “turning point in Federal-State relations, the beginning of decentralization of governmental power, the restoration of a rightful balance between the State capitals and the national capital.”88 He used the programs to direct federal aid away from socially and economically distressed central cities like New York, Detroit, and Pittsburgh and toward constituents in prosperous suburbs and the Sunbelt.89 His rhetoric of ending “unfairness,” restoring the constitutionally mandated relationship between levels of government, and fixing “broken” service delivery mechanisms obscured the basic assumption underlying his urban policy prescriptions: that out-of-control residents (and particularly the individual moral failings of African Americans in inner cities), rather than long-term structural problems such as racial discrimination and economic inequality, were the cause of urban social problems.
General revenue sharing proved popular among state and local officials. “General revenue sharing is the cornerstone of our national strategy and, as such, must be recognized and built upon,” National League of Cities vice president Allen Pritchard informed his board of directors. “We cannot allow those who don’t understand cities and our problems—as evidenced in their denunciation of general revenue sharing—to tear apart the coalition of city governments which triumphed over all odds in this field.”90 Most governors, too, supported the new funding arrangements, which to them marked the success of two decades of lobbying for an increased state role in administering and distributing federal funds.91 Pennsylvania governor Milton J. Shapp, however, was among the program’s most outspoken critics. He broke with the National Governors’ Conference over revenue sharing and attacked Nixon and his supporters in state houses across the country for implementing a program that failed to solve the fiscal problems facing heavily industrialized states like his and manufacturing centers like Pittsburgh in both the short or long term.92 But serious critics of revenue sharing were in the minority, and the program remained popular among governors and mayors because it allowed them the nearly unrestricted use of federal funds.
Emboldened by the political success of general revenue sharing, Nixon set out to replace the categorical grant system used to administer social programs—the number of which had nearly doubled between 1962 and 1967—with special revenue-sharing “block grants” for particular types of activities, such as community development or public health, without reference to a specific project. Compared to categorical grants, block grants had very few conditions attached, required little federal oversight, and promised to dramatically reduce the number of applications city and state governments needed to file to receive federal aid in any given year. Administrators at all levels of government agreed that the federal grants-in-aid system had become unmanageable.93 Nixon co-opted bipartisan support for streamlining administrative requirements for his more ideological project of realigning intergovernmental relations and weakening federal agencies that administered liberal social programs.
Gerald Ford signed Community Development Block Grant (CDBG) legislation into law the week after Nixon’s resignation. CDBG funds went disproportionately to central cities, and federal officials formulated